Google faces landmark lawsuit over sponsored links

[creme]

http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article2064672.ece

Holden Frith and agencies
A consumer watchdog is taking legal action against Google over the way it sells and displays its sponsored links, in a case that could "send shudders down the industry".

The Australian Competition and Consumer Commission (ACCC) said that it believed its action, which named Google Inc and Google subsidiaries in Ireland and Australia as defendants, was “the first to seek legal clarification of Google’s conduct from a trade practices perspective".

The case stems from 2005 when Trading Post, an Australian classified ads magazine, took out sponsored links in the name of two car dealerships from Newcastle, New South Wales. People clicking on the names of the dealerships found themselves on Trading Post’s website.

The ACCC dropped a case against Trading Post when the publication said it would stop using its competitors’ names in Google sponsored links. However, the watchdog now says that Google “engaged in misleading and deceptive conduct” by allowing Trading Post to buy ads in the name of the car dealerships.

In addition the ACCC is also claiming that the way Google displays its links is misleading.

On Google’s search results page, sponsored links appear in a coloured panel at the top of the page, and in a narrow column on the right-hand side of the page. Both areas include a small heading identifying the results as sponsored.

Companies and organisations can pay to get their results featured in these areas. In the main section of the page, results are determined by Google’s celebrated algorithm, which attempts to calculate the relevance and popularity of a page using a range of criteria including the number of inbound links to each page.

“Google, by failing to adequately distinguish sponsored links from ‘organic’ search results, has engaged and continues to engage in misleading and deceptive conduct,” the Australian Competition and Consumer Commission (ACCC) said in a statement.

Google Australia described the lawsuit as “an attack on all search engines” and said that it would contest it.

Shara Evans, head of the IT consultancy Market Clarity, said the case would have far-reaching implications if the court found that a search engine was responsible for monitoring everything that advertisers paid to put up as sponsored links.

“What would have a real impact is if Google had to take a policing role into the content of the advertisers,” she said. “That, I think, would send real shudders down the industry.”

Google has faced a stream of lawsuits from companies alleging that rivals have bought sponsored links triggered by their trademarked words or phrases. In one continuing case, American Blind & Wallpaper Factory is suing Google because searches for the company brought up sponsored links bought by its competitors.

Google has won similar cases in US federal courts brought by Geico, a car insurance company, and Rescue.com, an IT support company. Last year in France, Google lost a case in which the fashion company accused the company of running links to counterfeit goods alongside legitimate results.

 

[shockie]

i've heard from somewhere that if you want to buy keywords with adwords, those keywords have to be in the body of your website somewhere. perhaps that's a good first step, although i don't see any problem with buying a competitor's keyword. i usually skip over the ads at the top of serps because i know they don't have the information i'm looking for.

whereas in the actual results, i can see that the websites actually have the keywords i've searched for, and in what context they're being used.

 

[labrocca]

Shara Evans, head of the IT consultancy Market Clarity, said the case would have far-reaching implications if the court found that a search engine was responsible for monitoring everything that advertisers paid to put up as sponsored links.

What makes Google exempt from having to make sure the ads on it's site are legal. Can you imagine if Magazines or TV acted in a similar irresponsible manner?

“What would have a real impact is if Google had to take a policing role into the content of the advertisers,” she said. “That, I think, would send real shudders down the industry.”[/quote]

Ugh...no...that suit does NOT mention the content of it's advertisers sites...it mentions what's on Googles site. And yes...they are responsible for it imho. These are not FREE member placed items like forum posts or even search results. These are PAID commercials which are the revenue stream for Google. They certainly should be monitoring ads placed on their site. Simply because they are HUGE and have millions of ads doesn't make them exempt from laws.

 

[italiandragon]

Same news from Australia:

http://www.theage.com.au/news/busin...rnet-court-case/2007/07/14/1183833838815.html


Get googling for landmark internet court case
Email Print Normal font Large font James Kirby
July 15, 2007

Advertisement
AdvertisementIF you knew Google like I know Google you'd probably be less surprised why the industry regulator, the Australian Competition and Consumer Commission, has stepped in to take the wildly successful search engine company to court.

It's extraordinary really that Google can still hang on to its jolly, almost juvenile, public image as it's become perhaps the most powerful information source in the world. Google is now part of our language — our kids think that to research a subject is to "google" it — and nobody can say Google has not made life easier.

The ACCC and its highly capable chairman Graeme Samuel have filed a case against Google in the Federal Court claiming that the company does not adequately distinguish pure search results and advertising or "sponsored links".

Samuel has also cited a case where the Google system allowed a big company, Telstra, to have clear advantage over a small car dealership. This allegedly shows how companies with the deepest pockets can win the big rewards in a Google search.

The ACCC case could be an international landmark: internet advertising and the Google system are like the wild west right now, with few rules. They're screaming for reform. The court action hit headlines all over the world (145 stories at last count and, yes, I got that statistic from Google).

At the very least the ACCC case will reveal to many people for the first time how Google actually works.

When you check a result on a Google page you are looking at a mixture of pure search results and sponsored links — the sponsored links are at the top of the page and down the righthand side of the page and with every result you see in those sections of the page, someone has paid handsomely to be there.

In fact an entire industry has mushroomed around how you pay for Google "words", the key to online search success. In our own start-up publishing enterprise we sometimes pay up to $30,000 a month for Google words. We also pay consultants to tell us how to spend this money. We could employ someone full time for the amount we spend on this service — and I wonder how many times that scenario is repeated across the world.

The Google system is expensive, unavoidable and allegedly open to manipulation. It gives you some idea why Google is now worth $US162 billion ($A186 billion). The Silicon Valley company is a global online powerhouse with no serious opponent. Google makes more profits in three months than Yahoo, its nearest rival, makes in a year.

The ACCC is claiming that Google does not "expressly distinguish" advertising information from other information.

Google has called the case "an attack on all search engines" and will defend its corner.

However, in pursuing this line of inquiry in a court of law the ACCC will enable a public examination of the Google money-making machine and it will also highlight the mechanics of how some highly successful web stocks such as Seek and Wotif make their money.

It will be worth reading, and you'll be able to read it first on Google News.

James Kirby is editor of Eureka Report, an online publication financially backed by Carnegie Wylie and Company.

[email protected]

 

[GeoOwners]

It's funny to me that companies will spend so much on the adword campaines instead of using that cash to make an ass kicking site people will find anyway...

.

 

[EGS]

What makes Google exempt from having to make sure the ads on it's site are legal. Can you imagine if Magazines or TV acted in a similar irresponsible manner?

“What would have a real impact is if Google had to take a policing role into the content of the advertisers,” she said. “That, I think, would send real shudders down the industry.”

Ugh...no...that suit does NOT mention the content of it's advertisers sites...it mentions what's on Googles site. And yes...they are responsible for it imho. These are not FREE member placed items like forum posts or even search results. These are PAID commercials which are the revenue stream for Google. They certainly should be monitoring ads placed on their site. Simply because they are HUGE and have millions of ads doesn't make them exempt from laws.

Their billions of dollars seems to make them exempt from law though. :td: